Italy: an ECB coup by any other name

What happened on Sunday evening, May 27, in Rome, with the
rejection of the “populist” option for an Italian government,
can rightly be called a coup. It was executed by State President
Mattarella, but the real string-puller is the ECB. Just as
in summer 2011. The message has gone out once again – if
the powers that be don’t like the choice of the voters, they will
disregard it!

Mattarella claimed that the government presented by designated
PM Giuseppe Conte “could provoke, probably or even
inevitably, Italy’s exit from the euro” because of the views of
designated Finance Minister Paolo Savona. This, despite the
fact that Savona had made clear, in a statement that same day,
that, putting aside his well-known euro-critical views, he would
uphold the government program which does not contemplate
an exit from the single currency and aims to reduce the debt/
GDP ratio by increasing growth.

Nevertheless, Mattarella gave a highly partisan speech,
warning that “The uncertainty on our position on the euro has
alarmed Italian and foreign investors”, and painting a frightening
picture of a sovereign debt crisis, an increase of the spread
on Italian bonds, a stock market collapse and a threat to Italian
savers. “Membership in the Euro is a choice of fundamental
importance for the future of our country and our youth”, Mattarella
stated in his explanation of why he rejected the proposed
government.

Prior to Mattarella’s announcement, the market’s “invisible
hand” had made sure that the yield on Italian bonds increased,
helped by rating agencies such as Fitch and Moody’s that announced
a review of Italy’s debt and a possible downgrading.
That is the same scenario implemented in 2011, when the ECB
toppled the Berlusconi-Tremonti government.

Soon after his statement, Mattarella announced that he
would give the mandate to form a government to Carlo Cottarelli,
a technocrat whose views run entirely counter to the
program approved by the voters. A Cottarelli government will
not obtain a majority vote in Parliament, but will stay on to run
EIR STRATEGIC ALERT 2 WEEKLY NEWSLETTER n° 22 / 2018
everyday affairs until early elections can be held, in September/
October at the earliest.

Cottarelli is the man of the markets. After a career at the
IMF, he was called by the Letta government to make a “review
of spending”. When he proposed to cut 60,000 jobs from the
public sector, it was even too much even for Letta’s successor
Matteo Renzi who fired him. Cottarelli’s think-tank “Osservatorio
sul debito” (Debt Watch) produced the report claiming that
the Lega-M5S government program would mean up to €125
bn in new debt.

A technocratic cabinet in Italy won’t last long but it can certainly
inflict damage in the meantime, starting with decisions to
be taken at the June EU summit on the next five-year budget
and EU integration and migration policies.

With this move, the EU elites have once again shown their
will to do “whatever it takes” to hold on to their power. By doing
so, they fuel the popular revolt against them, thus ensuring
that their demise will be even more painful for them.
Eurocrats Warn of Doomsday Scenario in Italy

The reaction of the European Union – or more precisely of the
Empire – to the perspective of a so-called “populist” government
in Italy shows what is at stake is the future of the EU, no
more nor less.

That “Empire” deployed all of its brutal forces, including the
rating agencies, EU officials, the entire “Fourth Power” (the
media) and possibly more, to prevent any Lega-M5S government
from coming into being. Their campaign has focused on
the candidate for Finance Minister Paolo Savona, an experienced
banker and former minister who, on the basis of experience,
went from a Euro-enthusiast to a Euro-critic.

First the economic hitmen: on May 25, Moody’s announced
they were reviewing Italy’s credit rating, currently at BBB2,
because the coalition program might “weaken Italian fiscal capacity”
and block “structural reforms”. The implicit threat is to
downgrade the rating, which would jeopardize ECB purchases
of Italian bonds.

It is to be presumed that ECB chairman Mario Draghi, who
was reportedly in continuous contact with State President
Mattarella, delivered the threat personally. And speaking of interference,
Emmanuel Macron rang designated PM Giuseppe
Conte directly on Sunday, while the latter was preparing his
list of ministers.

All this on the backdrop of a massive international campaign
about the catastrophic consequences of a “populist” takeover
in Italy. First, it was the Financial Times with a warning on
“The Barbarians before the gates of Rome”, whose hysteria
was topped by last week’s Spiegel calling Italians (as a people)
“beggars” and “aggressive scroungers”. “How should we call a
Nation which first stretches out his hand to have others finance
their good life – and then threatens its donor if the latter reminds
them that debts should be paid?”

That choice headline was followed by a text full of cliches and insults.

it claims thatItalians are rich but prefer to beg for money and Draghi helps
them. “Begging would be the wrong term. A beggar at least
says thanks when someone fills his bag. Aggressive scrounging
is more adequate.”

Schiller Institute founder Helga Zepp-LaRouche responded
to Der Spiegel and other outrageous German comments on
May 27, dismissing them as “an incredible combination of arrogance
and economic incompetence”. “It is no coincidence that
the reactions to the new government in Italy from neo-liberal
circles are as hysterical as the reactions to Trump’s victory”.
she wrote. Interesting how “those circles that normally get all
worked up about an alleged lack of democracy in China have no
problem deriding the electoral results of an EU member state.”

Instead of the financial collapse they promise, Zepp-LaRouche
proposes to “take advantage of the positive programmatic
points in the coalition contract of the Conte government, such
as the Glass-Steagall Act and an Investment Bank, to implement
the anyway urgent reorganization of the transatlantic financial
system”